1. HR Practices in CHINA

2. Contents Introduction Country’s Overview HR Practices – Recruitment & Selection – Training & Retention – Motivation & Reward System – Work culture – Expatriate management Case study & its analysis An articles abstract Conclusion

3. Introduction IHRM? China has become the world's fastest growing major economy. Over the past 25 years of economic reform in china have led to impressive growth and significant integration. China is now the largest recipient of foreign direct investment (FDI) in the developing world. Due to these developments, it resulted in major changes in the management of industrial enterprises and hold considerable implications for human resource (HR) practices in the nation with the largest workforce in the world. Chinese are beginning to adopt a more individual-led management culture and give employees more responsibilities and rights. One of the major challenges faced by the companies i.e. both MNC’s & domestic companies are to acquire talented employees.

4. Country’s Overview China- People's Republic of China (PRC). Location- East Asia Capital city- Beijing Population -1.3 billion people. Language - Mandarin Chinese China is governed by the Communist Party of China (CPC) under a single- party system. China is the world's largest exporter and second largest importer of goods.

5. Contd.. China is the world's second largest economy by both nominal GDP and purchasing power parity (PPP). It is a member of United Nations Security Council, multinational organizations, WTO, APEC, BRIC, Shanghai Cooperation Organization, and G-20. China has been characterized as a potential superpower - academics, military analysts, and public policy and economics analysts.

6. HR Practices In china, Human Resources in the industrial sector were classified into two groups: Cadres-administrative staff or white collar employees such as managers, engineers and senior technicians in government organizations and in enterprises. Workers- lower level employees. Due to this division, there had been difference in –wage scale, performance appraisal.

7. Changes in Traditional HR practices The responsibility for labour allocation has shifted from a centralized planning authority to forecasting and planning departments within enterprises A contract labour system has replaced traditional lifetime employment Productions and reward systems moved from emphasizing equality to rewarding efficiency and performance.

8. Major HR practices in China Recruitment & Selection Training & Retention Motivation & Reward System Work culture Expatriate management

9. RECRUITMENT & SELECTION Companies in china recruit candidates mainly on basis of: Skills Employment history Total work experience Language abilities Career goals

10. Talent pool Companies in china face an overall talent pool that can be broken into three general categories of employees. Full expatriates Local hires Local –plus Each category has different salary and benefits packages.

11. Recruitment techniques Advertisem ents Advertisements are not permitted in the news media without “the prior approval of the local labour and social security department”. Advertisements are usually placed in local papers or specialised industry publications. Job fairs The common recruitment avenues are the labour market, personnel exchange seminars The job fairs are sponsored by the Labour Bureau. Campus Placements To recruit potential applicants, many companies regularly go to college or university campuses to interview students They can negotiate the job terms directly with the students Global Image The development of technology parks and technology development zones in China, there has been a concomitant growth in the use of Western HR strategies among multinational companies. Business manageme nt services China has excellent technical education, there is a dearth of managerial training because, in the past, managers were promoted on the basis of their political party allegiance, and many parts of the country remain ‘provincialzed’ as shown in the HR inflexibility. Corporate Co- ordination International Communications and PR companies are developing offices throughout China to assist local and overseas businesses work together effectively to meet the demands of Eastern and Western markets.

12. Selection Techniques Interview The interview is a common selection tool for many companies and is the dominant method used. Punctuality is very important in China and in greeting the applicant the employer will not look at them directly because lowering of eyes shows respect. Tests Technology tests, technical tests, problem solving tests and English proficiency tests. Traditional companies rarely use psychological or aptitude testing, psychometric testing of abilities and attitudes, interests and motivations, needs and aspirations and/or personal management style has been adopted from Western HR practices, especially in the Healthcare industry. Behavioural Event Interactive role play, simulation exercises and leaderless group discussion (LGD).

13. TRAINING & RETENTION Some of the major training methods are: Technical training(both expatriates & Local employees) Language training( expatriates) Pre – departure training(expatriates) Training on work culture( expatriates)

14. Retention Strategies Retention strategies Use global resources Be aware of reluctance to relocate Considerati on of office space and location Invest in working condition Establish communi ty service programs Plan social gatherings Keep HR communica tion channels open Use non compete agreement s

15. MOTIVATION & REWARD SYSTEM To increase the quality and quantity of production of their companies and greater development of the company. Rewards comprise the incentive systems such as promotions and stock option. Stock option has emerged as the latest method. Human resources are managed by two methods- positive and negative.

16. WORK CULTURE Respect for age & hierarchy Face & harmony Group orientation Personal relations or guianxi Features of Chinese work culture

17. EXPATRIATE MANAGEMENT From top executive to professional, the % of expatriate from western, expatriate from Hong Kong and expatriate from Taiwan is decreasing, but % of expatriate from Asia Pacific and locally hired foreigner is increasing. 15% - 23% of companies planned to reduce hire of expatriate in 2009, but almost the same amount of companies also indicated the intention to hire more expatriates in 2009. About 35% of companies would like to increase hire of locally hired foreigner and locally hired returnee respectively. Top issues: managing expatriation cost, localization Compensation approach: Home country/balance sheet approach is very popular for expatriate. mixed approach is an alternative way for expatriate from Hong Kong. local plus approach is an alternative way for expatriate from Taiwan. Types of Expats: Expatriate from western countries, Expatriate from Asia Pacific but outside Greater China, Expatriate from Hong Kong, Expatriate from Taiwan, Locally Hired Foreigner, Locally Hired Returnee

18. Locally Hired Foreigner Medical Benefit Insurance Housing Benefit Car Benefit 5. Home Visit Assistance Locally Hired Returnee Medical Benefit Insurance Housing Benefit Car Benefit Retirement Benefit Expat from Western Countries Housing Benefit Insurance Medical Benefit Home Visit Assistance Car Benefit Expat from Asia Pacific Medical Benefit Insurance Housing Benefit Home Visit Assistance Children Education Benefit Expat from Hong Kong Medical Benefit Home Visit Assistance Moving/Relocation Assistance Insurance Housing Benefit Expat from Taiwan Home Visit Assistance Moving/Relocation Assistance Medical Benefit Insurance Housing Benefit Expat allowance

19. C ase study & its Analysis “A FIRST-TIME EXPATRIATE'S EXPERIENCE IN A JOINT VENTURE IN CHINA” Source: 7 th Editions of (1) Strategic Management and Business Policy and (2) Cases in Strategic Management. by Thomas L. Wheelen and J. David Hunger.

20. CASE OBJECTIVE To demonstrate the effect on the internationalization process of a company, of corporate HRM practices such as selection processes, re-entry and succession planning. To illustrate the importance of HQ support for expatriate employees. To demonstrate the effects of drastic changes in a corporation's internationalization strategy on expatriates.

21. Case problem An apparent failure on the part of Controls Inc. to understand the negotiation process for JV contracts in China No proper structure/method of selection process

22. 1.Critique the apparent expatriate selection process used by Controls Inc? Selection process was haphazard(chaotic) No formal process No proper planning, Co-ordination which is governed by organizational politics.

23. 2.Was James Randolf a good choice for this position? Justify your arguments. Randolf was a very good choice for this position. But, Randolf selection seems more accidental than based on an understanding of what was required for the position by HQ. Conventional wisdom suggests that one should not generally send a 50-year-old employee on a first-time expatriate assignment as a senior manager.

24. Selection Criteria Technical Criteria, Management Skills Personal Attributes Cultural Skills

25. 3.What are the consequences of badly managed expatriate management programs Company should include international management experience as an integral management development strategy. Unlikely to develop managers who can function effectively as global leaders.